Defining Your Practice

Las Vegas—“How do advisors find the time to do all that your research is telling them to do? There seems to be a lot required to meet the expectations of today’s affluent investor,” asked an advisor during the Q&A following my presentation. “Your research can be quite intimidating.”

Knowing that this question was on the minds of many of the advisors present, I chuckled and then took a long pause before responding. The following is a synopsis of a 30-minute group discussion that followed.

Yes, I agreed, working to attract, service, and develop loyal affluent clients can appear overwhelming at first glance—especially for advisors who have never really defined the affluent as their niche. And I recognize that nearly every advisor, in some way, shape or form, is targeting today’s affluent investor. However, our data is quite clear on a number of issues:

Very few advisors are experiencing much success in marketing their services to today’s affluent investor. In 2011, 2.4 percent brought in 10 or more $1 million or greater new clients.

Too many financial advisors have yet to establish minimum requirements for on-boarding a new client. (A number of firms are beginning to influence this through various forms of compensation adjustments.)

Most advisors haven’t established a clearly defined ideal client profile.

Many advisors have yet to establish clearly defined service models that enable them to have a consistent client experience that is linked to their current client segmentation schematic. (Elite advisors have two service models.)

Most advisors don’t understand the concerns and expectations of today’s affluent investor. This is probably one of the reasons why our latest research tells us that not many advisors are meeting the expectations of their affluent clients.

The majority of advisors don’t understand the concept of the relationship management-relationship marketing nexus regarding today’s affluent. Only 15 percent of advisors claim to be confident in their ability to sell in affluent social circles, although far less are acquiring new affluent clients with any consistency.

A quick glance at the above might lead you to believe that my questioner was right; defining your practice to attract, service and develop loyal affluent clients is overwhelming. However on closer inspection, you will discover that this train of thought is really a myth. How so?

First of all, Rome wasn’t built in a day, and an advisor can’t establish an elite practice that caters to an affluent niche in a month. This is a process that involves:

Expanding services to existing clients, one client at a time.

Meeting with one referral alliance partner (CPA, attorney, etc.) at a time to re-brand your services and deepen your relationship.

Acquiring one new affluent client at a time.

In answering their questions, I explained to this group of veteran advisors that the bottom line is simple. Over time, any advisor who is willing to execute the proper activities can excel in acquiring, servicing, and developing loyal affluent clients. It’s been our experience with coaching advisors that the timeline is anywhere between six to 18 months, depending on the advisor.

In other words, your new and improved affluent service model doesn’t need to be presented to all of your top clients at once, just one client at a time. As an aside, we’ve yet to hear of an advisor bemoaning the fact that he or she is now spending more time with their affluent clients. It’s a new world, and they love it!

This is as much a mindset issue as anything else. For advisors who are serious about working with today’s affluent, it’s essential that they define their practice accordingly. And by that, I’m referring to everything from the suite of financial services offered, to the personalized service being delivered, to relationship management on both a business and social level.

In other words, if you want to cater to the affluent, you need to design your practice accordingly. Advisors can’t be all things to all people, no more than the Ritz-Carlton can design a suite of services to accommodate Motel 6 profile guests.

Finally, I shared with the group a conversation I’d just had with one of our coaching clients. This financial advisor is a top advisor with his firm and a pro’s pro, and I’m paraphrasing…

“Once I decided to target the affluent, 20 years of programming changed. I segmented my client base, jettisoned smaller clients, developed two clear service models, and stopped taking on smaller clients. Now I’ve got sanity in my business—it’s clearly defined, I socialize with my affluent clients, and I get introduced into their spheres of influence. I’ve already brought in $21 million this year—and I’m having a blast.”

Granted, these are the words of an elite advisor, but an elite advisor who has redefined his practice to cater to today’s affluent opportunities. And yes, you can do the same.